|UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549www.sec.gov
|--------------------------------------------------------------------------------



|FORM 10-QSB
|-----------

[X]
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934

Amended Quarterly Report For the Quarterly Period Ended

March
31, 2004



|Commission File Number:
000-50411
|---------------------------------



CARTOONACQUISITION,
INC.



|(Exact Name of Registrant asSpecified in its Charter)
|-----------------------------------------------------

Delaware
    
    20-0269287(State of Incorporation)
    
    (I.R.S. Employer Identification Number)




|Suite 90014 Franklin StreetRochester, New York 14604(Address of Principal Executive Offices)
      ( 585 ) 495-6907(Registrant's Telephone Number, including Area
      Code)
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Check whether the issuer: (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days Yes
(2)X No ( 1)X

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports
required to be filed by Section12, 13 or15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes___ No
___



|APPLICABLE ONLY TO CORPORATE
  ISSUERS
|--------------------------------------

State the number of shares outstanding of each of the issuers
classes of common equity, as of the latest practicable date: Common Stock, par
value $ 0.0001 per share, 1 Share

Transitional Small Business Disclosure Format (Check one): Yes No
X

---

APPLICABLE DISCLOSURES AND DISCLAIMERS.

This Report is an Amendment to the Quarterly Report for the period
ended March 31, 2004 and filed with the U. S. Securities and Exchange Commission
(the "Commission") on Form 10-QSB/A (this "Report") and contains summaries of
the material terms of prospective plans of operation and the unaudited financial
condition of the Registrant, which the Registrant believes to be accurate. Such
summaries are qualified in their entirety by reference to any such documents.
The Registrant has stated all of the material facts necessary for the Commission
and the public to make an informed decision pertinent to the matters subject and
to the disclosures herein by amendment made.

NOTICE OF EVENTS TO BE REPORTED AND TIME FOR FILING OF
REPORT.

This Report contains information on the Registrant as of the date
and for the period ended on the cover hereof, as amended.

MATERIALS INCORPORATED BY REFERENCE.

Prior to the filing of this Report by the Registrant, the
Registrant filed certain information with the Commission under the cover of Form
10-QSB, for the period ended March 31, 2004 (which was filed on October 24,
2005), the information in which is the subject of this Report, as amended. The
Registrant incorporates all or part of the information contained in said Form
10-QSB herein by reference thereto.



|FURTHER UNDERTAKINGS.
|---------------------

The
Registrant, for the events that occurred during the period described herein,
further agrees (a) to timely file an amendment or amendments that reflect a
change or changes in the facts or events that, individually or collectively,
represent a fundamental change in the information contained in this Report on
Form 10-QSB/A for the period in question, and (b) to include any other
information that may be pertinent to the events described in this Report and
obtained by the Registrant on a date beyond the date of this Report.

2

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|PART I  FINANCIAL
INFORMATION
|------------------------------

Certain statements contained in this Amended Quarterly Report for
the Quarterly Period Ended March 31, 2004 on Form 10-QSB/A (the "Report"),
including, without limitation, statements containing the words "anticipates",
"expects", "hopeful", and words of similar import, constitute "forward-looking"
statements. The Registrant cautions readers to not place undue reliance on these
forward-looking statements. The Registrant's actual results could differ
materially from those statements from those anticipated in these forward-looking
statements for many reasons, including certain risks associated with the
Registrant, its securities, and its prospective or future business purpose or
plan of operations, and that are described or set forth in this Report, and in
other documents the Registrant files with the Securities and Exchange Commission
(the "Commission"), which includes this Report, and all amendments
hereof.



|Item 1. Financial
Statements.
|-----------------------------

The
accompanying unaudited financial statements have been prepared in accordance
with the instructions on Form 10-QSB (applicable to non-asset-backed, small
business issuers), and, therefore, do not include all of the information and
footnotes that may be necessary for a complete presentation and evaluation of
the Registrant's financial position, results of operations, cash flows and
stockholders' deficit, in conformity with generally accepted accounting
principles. In the opinion of the Registrant's senior executive management, all
adjustments considered necessary for a fair presentation of the results of
operation and financial position of the Registrant have been included and all
such adjustments are of a normal recurring nature. The operating results for the
three months ended March 31, 2004 are not necessarily indicative of the results
that can be expected for the year ending December 31, 2004.

CARTOON ACQUISITION, INC.(A Development Stage Company)Index to Financial StatementsPageFinancial Statements:Balance Sheets as of March 31, 2004(unaudited) and December 31, 2003
    
    F-2Statements of Operations for the threemonths ended March 31, 2004 andfor
      the period September 25, 2003(date of inception) to March 31, 2004(unaudited)
    
    F-3Statements of Cash Flows for the threemonths ended March 31, 2004 andfor
      the period September 25, 2003(date of inception) to March 31, 2004(unaudited)
    
    F-4Notes to Financial Statements
    
    F-5


3

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CARTOON ACQUISITION, INC.(A Development Stage Company)Balance SheetsMarch 31,
    
    
    
    December 31,2004
    
    
    
    2003(Unaudited)AssetsCurrent
      assets:Cash and cash
      equivalents
    
    $
    
    -
    
    $
    
    -Prepaid
      expense
    
    
    
    200
    
    
    
    -Total current
      assets
    
    
    
    200
    
    
    
    -Other
      assets
    
    
    
    -
    
    
    
    -Total
      assets
    
    $
    
    200
    
    $
    
    -Liabilities and Stockholder's
      Equity(Deficiency)Current
      liabilities:Accounts payable
      and accrued expenses
    
    $
    
    -
    
    $
    
    60Total current
      liabilities
    
    
    
    -
    
    
    
    60Other
      liabilities
    
    
    
    -
    
    
    
    -Total
      liabilities
    
    
    
    -
    
    
    
    60Stockholder's
      equity (deficiency):Preferred stock,
      $.0001 par value; 20,000,000sharesauthorized, 0
      shares issued and outstanding
    
    
    
    -
    
    
    
    -Common stock,
      $.0001 par value; 100,000,000sharesauthorized, 1
      share issued and outstanding
    
    
    
    -
    
    
    
    -Additional
      paid-in capital
    
    
    
    399
    
    
    
    124Deficit
      accumulated during the developmentstage
    
    
    
    (199)
    
    
    
    (184)


4

---

Total
      stockholder's equity (deficiency)
    
    
    
    200
    
    
    
    (60)Total liabilities
      and stockholder's equity(deficiency)
    
    $
    
    200
    
    $
    
    -See notes to
      financial statements.


5

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CARTOON ACQUISITION, INC.(A Development Stage Company)Statements of Operations(Unaudited)ThreeMonths
    
    
    
    Cumulative Duringthe DevelopmentEnded
    
    
    
    Stage(September 25, 2003March 31,
    
    
    
    to2004
    
    
    
    March 31, 2004)Revenues
    
    $
    
    -
    
    $
    
    -Expenses:General and
      administrative
    
    
    
    15
    
    
    
    199Total
      expenses
    
    
    
    15
    
    
    
    199Net
      loss
    
    $
    
    (15)
    
    $
    
    (199)Net loss per
      share, basic and diluted
    
    $
    
    (15.00)Weighted average
      number of commonshares
      outstanding, basic and diluted
    
    
    
    1




|See Notes to
      Financial Statements.
|----------------------------------------

6

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CARTOON ACQUISITION, INC.(A Development Stage Company)Statements of Cash Flows(Unaudited)ThreeMonths
    
    
    
    Cumulative Duringthe DevelopmentEnded
    
    
    
    Stage(September 25, 2003March 31,
    
    
    
    to2004
    
    
    
    March 31, 2004)Cash flows from
      operating activities:Net
      loss
    
    $
    
    (15)
    
    $
    
    (199)Services rendered
      for common stock
    
    
    
    -
    
    
    
    124Changes in
      operating assets and liabilities:Prepaid
      expense
    
    
    
    (200)
    
    
    
    (200)Accounts payable
      and accrued expenses
    
    
    
    (60)
    
    
    
    -Net cash provided
      by (used in) operating activities
    
    
    
    (275)
    
    
    
    (275)Cash flows from
      investing activities
    
    
    
    -
    
    
    
    -Cash flows from
      financing activities:Company
      expenditure paid byCompany
      attorney
    
    
    
    275
    
    
    
    275Net cash provided
      by (used in)financing
      activities
    
    
    
    275
    
    
    
    275Net increase
      (decrease) in cash
    
    
    
    -
    
    
    
    -Cash and cash
      equivalents, beginning of period
    
    
    
    -
    
    
    
    -Cash and cash
      equivalents, end of period
    
    $
    
    -
    
    $
    
    -Supplemental
      disclosures of cash flow information:Interest
      paid
    
    $
    
    -
    
    $
    
    -Income taxes
      paid
    
    $
    
    -
    
    $
    
    -


7

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|See Notes to
      Financial Statements.
|----------------------------------------



|CARTOON ACQUISITION, INC.(A Development Stage Company)Notes to Financial StatementsFor the Three Months Ended March 31, 2004
      andFor the Period September 25, 2003 (Inception)to March 31, 2004
(Unaudited)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE
1  INTERIM FINANCIAL STATEMENTS

The
unaudited financial statements as of March 31, 2004 and for the three months
ended March 31, 2004 and for the period September 25, 2003 (inception) to March
31, 2004 have been prepared in accordance with accounting principles generally
accepted in the United States for interim financial information and with
instructions to Form 10-QSB. In the opinion of management, the unaudited
financial statements have been prepared on the same basis as the annual
financial statements and reflect all adjustments, which include only normal
recurring adjustments, necessary to present fairly the financial position as of
March 31, 2004 and the results of operations and cash flows for the periods
ended March 31, 2004. The financial data and other information disclosed in
these notes to the interim financial statements related to these periods are
unaudited. The results for the three month period ended March 31, 2004 are not
necessarily indicative of the results to be expected for any subsequent quarter
of the entire year ending December 31, 2004. The balance sheet at December 31,
2003 has been derived from the audited financial statements at that
date.

Certain information and footnote disclosures normally included in
financial statements prepared in accordance with accounting principles generally
accepted in the United States have been condensed or omitted pursuant to the
Securities and Exchange Commissions rules and regulations. These unaudited
financial statements should be read in conjunction with our audited financial
statements and notes thereto for the period September 25, 2003 (inception) to
December 31, 2003 as included in our report on Form 10-KSB.



|NOTE 2  ORGANIZATION
|---------------------

Cartoon Acquisition, Inc. (the Company) was incorporated in the
State of Delaware on September 25, 2003. The Company has no products or
services; the Company is seeking a business to merge with or acquire.

On
May 4, 2004, the Company effected a reverse stock split of 1 share for each
1,240,000 shares held, thereby decreasing the number of issued and outstanding
common shares from 1,240,000 to 1. All references to shares and per share
amounts in the accompanying financial statements have been presented to
retroactively reflect this reverse split.



|NOTE 3  BASIS OF
PRESENTATION
|------------------------------

The
Company has been presented as a development stage enterprise in accordance
with Statement of Financial Accounting Standards (SFAS) No.7, Accounting and
Reporting by Development Stage Enterprises. Since inception, the Companys
activities have been limited to organizational efforts and filing a Registration
Statement on Form 10-SB with the Securities and Exchange Commission
("SEC").

8

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|CARTOON ACQUISITION, INC.(A Development Stage Company)Notes to Financial StatementsFor the Three Months Ended March 31, 2004
      andFor the Period September 25, 2003 (Inception)to March 31, 2004
(Unaudited)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

At
March 31, 2004, the Company had working capital and stockholders equity of
$200. For the period September 25, 2003 (inception) to March 31, 2004, the
Company incurred net losses of $199. Further, the Company failed to timely file
periodic reports with the SEC subsequent to its filing of its Registration
Statement on Form 10-SB on October 3, 2003. These factors create uncertainty as
to the Companys ability to continue as a going concern. The Company is making
efforts to acquire a business with assets and operations. However, there is no
assurance that the Company will be successful in accomplishing this objective.
The financial statements do not include any adjustments that might be necessary
should the Company be unable to continue as a going concern.



|NOTE 4  STOCKHOLDERS
EQUITY
|-----------------------------

In
September 2003, the Company issued 1 share of its common stock to its sole
officer and director for services valued at $124.

In
March 2004, the Companys attorney paid a $275 expenditure on behalf of the
Company. The Company has reflected this expenditure as an increase in additional
paid-in capital.



|NOTE 5  INCOME TAXES
|---------------------

No
provision for income taxes has been recorded since the Company has incurred net
losses since inception.

|At
      March 31, 2004, deferred tax assets consist of: |  |   |  |     
|-------------------------------------------------------- |  | - |  | ----
|Net
      operating loss carryforward                    |  | $ |  | 68  
|Less
      valuation allowance                           |  |   |  | (68)
|Net                                                      |  | $ |  | -   

Based on managements present assessment, the Company has not yet
determined it to be more likely than not that a deferred tax asset of $68
attributable to the future utilization of the $199 net operating loss
carryforward as of March 31, 2004 will be realized. Accordingly, the Company has
provided a 100% allowance against the deferred tax asset in the financial
statements at March 31, 2004. The Company will continue to review this valuation
allowance and make adjustments as appropriate. The net operating loss
carryforward expires in years 2023 and 2024 in the amounts of $184 and $15,
respectively.

Current tax laws limit the amount of loss available to be offset
against future taxable income when a substantial change in ownership occurs.
Therefore, the amount available to offset future taxable income may be
limited.

9

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CARTOON ACQUISITION, INC.

(A
Development Stage Company)

Notes
to Financial Statements For the Three Months Ended March 31, 2004 and For the
Period September 25, 2003 (Inception) to March 31, 2004
(Unaudited)



|NOTE 6  SUBSEQUENT
EVENTS
|--------------------------

On
May 14, 2004, the Companys sole stockholder, officer and director resigned as
officer and director and one of the Companys attorneys was elected sole officer
and director. Also, on May 14, 2004, the Companys new sole officer and director
acquired 200,000 shares of common stock from the Company for $20.

On
January 25, 2005, the Companys sole officer and director resigned as officer
and director and sold 185,000 of the 200,000 shares of Company common stock
owned by him to an unrelated third party for a promissory note in the amount of
$100,000. This promissory note does not bear interest, is due on or before
August 24, 2005, and is secured by the 185,000 shares of Company common
stock.



10

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Item
2. Managements Discussion and Analysis or Plan of Operations.

Some of the statements made in Part I, Item 2 of this Report may be
deemed to be "forward-looking" statements, as that term is defined in Section
27A of the Securities Act of 1933 (15 U.S.C. 77z-2) and in Section 21E of the
Securities Exchange Act of 1934 (15 U.S.C. 78u-5), which are referred to as
"statutory safe harbor" provisions. Forward-looking statements are not
historical facts; rather, forward-looking statements are based upon the opinions
and estimates of the Company's management at the time such statements are made.
Every forward-looking statement is subject to inherent risks and uncertainties
that could cause the actual results to differ materially from the plans,
projections, or expectations expressed or implied by such statement at the time
the statement was made. The Company cautions the public not to place undue
influence on these forward-looking statements, which speak only as of the date
they were made and may not have been updated in further filings, schedules, or
reports required to be filed with the Commission, or with any other body
government.

Certain statements contained in this section of this Report may
infer an impression of optimism about the Company's beliefs and expectations,
expressed through words such as "expects", "anticipates", "intends", "plans",
"believes", "seeks", "estimates", "contemplates", "prospective", "attempt",
"proposed", and similar expressions or terms identify forward looking
statements.

The
Company was formed to identify and effect a business combination with a
qualified entity. A combination will normally take the form of a merger,
stock-for-stock exchange, or stock-for-assets exchange (the "business
combination"). Historically, in most instances the target company will wish to
structure the business combination to be within the definition of a tax-free
reorganization under Section 351 or Section 368 of the Internal Revenue Code of
1986, as amended. No assurances can be given that the Company will be successful
in locating or negotiating with any target business.

The
Company has not restricted its search for any specific kind of businesses, and
it may acquire a business which is in its preliminary or development stage,
which is already in operation, or in essentially any stage of its business life.
It is impossible to predict the status of any business in which the Company may
become engaged, in that such business may need to seek additional capital, may
desire to have its shares publicly traded, or may seek other perceived
advantages which the Company may offer.

In
implementing a structure for a particular business acquisition, the Company may
become a party to a merger, consolidation, reorganization, joint venture, or
licensing agreement with another corporation or entity.

It
is anticipated that any securities issued in any such business combination would
be issued in reliance upon exemption from registration under applicable Federal
and state securities laws. In some circumstances, however, as a negotiated
element of its transaction, the Company may agree to register all or a part of
such securities as part of the business combination or at specified times
thereafter.

Negotiations with a target company will likely focus on the
percentage of the Company which the target company shareholders would acquire in
exchange for their shareholdings. Although the terms of such agreements cannot
be predicted, generally such agreements will require certain representations and
warranties of the parties thereto, will specify certain events of default, will
detail the terms of closing and the conditions which must be satisfied by the
parties prior to and after such closing and will include miscellaneous other
terms. Any merger or acquisition effected by the Company can be expected to have
a significant dilutive effect on the percentage of shares held by the Company's
shareholders at such time. Moreover, any acquisition by a qualified business
combination, or otherwise, would require the Company to enter into one or more
material agreements, and, more likely that not, would impose significant
fiscal

11

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and
performance obligations on the Company, all of which would be required to be
reported by the Company to the Commission.



|Item 3. Controls and
Procedures.
|--------------------------------

Some of the statements made in Part I, Item 3 of this Report may be
deemed to be "forward-looking" statements, as that term is defined in Section
27A of the Securities Act of 1933 (15 U.S.C. 77z-2) and in Section 21E of the
Securities Exchange Act of 1934 (15 U.S.C. 78u-5), which are referred to as
"statutory safe harbor" provisions. Forward-looking statements are not
historical facts; rather, forward-looking statements are based upon the opinions
and estimates of the Company's management at the time such statements are made.
Every forward-looking statement is subject to inherent risks and uncertainties
that could cause the actual results to differ materially from the plans,
projections, or expectations expressed or implied by such statement at the time
the statement was made. The Company cautions the public not to place undue
influence on these forward-looking statements, which speak only as of the date
they were made and may not have been updated in further filings, schedules, or
reports required to be filed with the Commission, or with any other body
government.

Certain statements contained in this section of this Report may
infer an impression of optimism about the Company's beliefs and expectations,
expressed through words such as "expects", "anticipates", "intends", "plans",
"believes", "seeks", "estimates", "contemplates", "prospective", "attempt",
"proposed", and similar expressions or terms identify forward looking
statements.

The
Company (or the "Registrant") has one class of securities registered under the
Securities Exchange Act of 1934 (the "Exchange Act"); namely, the Company's
common stock, par value $0.0001 per share. The Company is not an "asset-backed"
issuer, as that term is defined in 17 CFR 229.1101. Also, the Company does not
have any securities registered, nor any offering pending or contemplated, under
the Securities Act of 1933 or the Investment Company Act of 1940 with the
Commission.

Prior to the actual filing date hereof, the Registrant did fail to
timely file all of its reports to the Commission, which were required to be
filed by the Registrant pursuant to section 13(a) or section 15(d) of the
Exchange Act. The Registrant attributes its delinquency in that regard to (a)
extreme limitations on its fiscal capabilities due to its lack of development
and engagement in an ongoing business enterprise (and, further in that extent,
because the Registrant was incapable of securing capital or credit
accommodations to permit it to conduct its operations), (b) unpredictability
with regard to its senior executive management's capability to have performed
its duties on a full-time or part-time basis in order to properly have
administered its affairs (to include the Company's incapability to hire and
retain qualified support and technical personnel), and (c) the Registrant's
inability to effectively (without undue effort and/or unreasonable expense)
gather, assemble, prepare, and disseminate the required information.

On
or about January 25, 2005, with the principal objective of aggressively pursuing
the Company's development, Randolph S. Hudson purchased approximately 92.5% of
the Registrant's common voting equity securities from James W. Margulies under a
private securities transaction. Although Mr. Hudson's administration of the
Company has been plagued by many of the same obstacles and circumstances as were
experienced by the Company's prior management and shareholders (surrounding the
Company's delinquent reporting and tardy development), it was and remains Mr.
Hudson's principal objectives to (a) timely remedy the Registrant's delinquent
filings with the Commission and (b) immediately undertake his aggressive pursuit
to develop the Company.

In
addition to the Company's dilemmas, from the date the Company was required to
file its initial reports, the Federal legislature has adopted, revised, or
amended certain Federal securities laws, which the Commission is actively
enforcing in order to prevent acts of frauds that were demonstrated by some
of

12

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this nation's largest companies, which, in turn, caused great harm
and financial loss the investing public. Some of these laws contained in the
Code of Federal Regulations, include the Sarbanes-Oxley Act of 2002, Regulation
S-X (which governs accounting issues applicable to reporting companies), the
strict rules applicable to the Public Company Accounting Oversight Board (the
"PCAOB", which governs the Company's non-certifying and certifying accountants),
and a host of other changes to those laws and to the U. S. Code applicable to
securities and commodities markets. All of the government's actions, and, of
primary concern - all of the more stringent and more actively policies of the
Commission, have created significant new reporting impositions on public
companies to improve financial accounting, corporate reporting, and personal
accountability by a public company's senior executive officers.

Consequently, prior to Mr. Hudson's purchase of that certain
percentage of the Company's stock (as was briefly described hereinabove, and
which was previously reported by Mr. Hudson on this Schedule 13D filing), and,
for the other reasons set forth hereinabove, the Company did not have adequate,
or had minimal, disclosure controls and procedures in place. Historically, in
times past, a Company's system of "checks and balances" would have been
routinely handles by its certifying accountant; however, because the Company was
not actively engaged in its operations, and for the other reasons mentioned
hereinabove, the Company's then certifying accountant was neither reviewing nor
preparing the Company's statements of financial conditions.

Fortunately, because the Company has been dormant, in the opinion
of the Company's present Chief Executive Officer (who is also the Company's
Chief Financial Officer) the Company's lack or exercise of disclosure controls
and procedures did not cause any material effect on any information, which was
either prepared then or that is being prepared and submitted on this
date.

In
conclusion of the aforesaid statements, prior to January 25, 2005, in respect of
the controls and procedures promulgated by 17 CFR 240.13a -15 and 17 CFR 240.15d
-15:

|· | The
      Company did not have adequate internal control over financial reporting
      (as defined in 17 CFR 240.13a-15); and                                                                                                                                                                                                                          
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|· | In
      the absence of full-time senior executive management, the Company was
      unable to effectively evaluate the effectiveness by its senior executive
      management of its controls and procedures for what was to have been its
      quarterly report for this period, on the date this report was originally
      due to have been filed.
| 

Presently (the date on which this Report was actually filed), the
Company's Chief Executive Officer, Randolph S. Hudson, has established full
disclosure controls and procedures. Some of these remedies include the purchase
of professional internal accounting software that operates with multiple systems
of entry that "check and cross-check" entries and the engagement of a
PCAOB-qualified accountant to perform non-certified compilations, prior to
delivering his results to the Company's PCAOB-qualified certifying
accountant.

With specific regard to internal control over financial reporting
by the Registrant and by the Registrant's senior executive officers pursuant to
the sub-sections enumerated in 17 CFR 228.308: (a) The Company has at all times
maintained adequate financial and non-financial records, which fairly and
accurately reflect the dispositions of the assets of the Company, (b) the
Company has at all times been able to provide more than reasonable assurances
that any such financial statements were capable of being prepared under
generally accepted accounting principles and that the receipts and expenditure
of the Company were being made only in accordance with the authorizations of the
senior executive management and by the Company's Board of Directors, and (c) the
Company has at all times been able to provide reasonable assurances regarding
the prevention or timely detection of any unauthorized

13

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acquisition, use, or
disposition of the Company's assets, any of which could have caused a material
effect on the Company's financial statements.



|PART II --
      OTHER INFORMATION
|----------------------------------



|Item 1.
      Legal Proceedings
|-------------------------------

There are no legal
proceedings against the Company and the Company is unaware of such proceedings
contemplated against it.



|Item 2.
      Changes in Securities
|-----------------------------------

The
information required by Item 2 of Part II of this Report is not
applicable.



|Item 3.
      Defaults upon Senior Securities
|---------------------------------------------

The
information required by Item 3 of Part II of this Report is not
applicable.

Item 4. Submission
of Matters to a Vote of Security Holders

The
information required by this Item 4 of Part II of this Report is not
applicable.



|Item 5.
      Other Information
|-------------------------------

Some of the statements
made in Item 8.01 of this Report may be deemed to be "forward-looking
statements", as that term is defined in Section 27A of the Securities Act of
1933 (15 U.S.C. 77z-2) and in Section 21E of the Securities Exchange Act of 1934
(15 U.S.C. 78u-5), which are referred to as "statutory safe harbor" provisions.
Forward-looking statements are not historical facts; rather, forward-looking
statements are based upon the opinions and estimates of the Registrant's
management at the time such statements are made. Every forward-looking statement
is subject to inherent risks and uncertainties that could cause the actual
results to differ materially from the plans, projections, or expectations
expressed or implied by such statement at the time the statement was made. The
Registrant cautions the public not to place undue influence on these
forward-looking statements, which speak only as of the date they were made and
may not have been updated in further filings, schedules, or reports required to
be filed with the Commission, or with any other body government.

Certain statements
contained in this section of this Report may infer an impression of optimism
about the Registrant's beliefs and expectations, expressed through words such as
"expects", "anticipates", "intends", "plans", "believes", "seeks", "estimates",
"contemplates", "prospective", "attempt", "proposed", and similar expressions or
terms identify forward looking statements.

|A. | FORM 10-QSB
      REQUIRING AMENDMENT. This Amended Quarterly Report for the Quarterly
      Period Ended March 31, 2004 was prepared because the Registrant did not
      correctly file the unamneded Form 10-QSB for the Period Ended March 31,
      2004.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  

The
errors or omissions in that certain unamended Quarterly Report are as
follows:

|(1) | The
      cover page of the subject report contained the incorrect placement of a
      signature graphic in place of the Registrant's logo.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------
|   

14

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|(2) | The
      Registrant failed to correctly annex the required "long form"
      certification by its Principal Executive Officer.
|--- | -------------------------------------------------------------------------------------------------------------------------------
|   
|(3) | The
      Registrant failed to correctly annex the required "long form"
      certification by its Principal Financial Officer.
|   

The
Registrant is filing this amended Report to reflect the amendments to rectify
the errors or omissions stated hereinabove.

B.
NOTIFICATION OF PROSPECTIVE RISK TO SHAREHOLDERS OF THE REGISTRANT.

Due
to certain administrative impediments that were encountered by the Registrant to
prepare and to have timely filed this Report with the Commission (chiefly, that
of a temporary financial hardship endured by the Registrant), the Registrant
does hereby notify its shareholders: Depending on the Commission's view of the
Registrant's late filing hereof, the Commission may notify the Registrant of its
disapproval and may notice the Registrant, or, may impose a fine or other
penalty against the Registrant or against the Registrant's Chief Executive
Officer for said late filing.

The
imposition of any fine or penalty would cause a material adverse effect on the
Registrant's current and future financial condition; and, any formal censure
would impede the Registrant's contemplated and orderly future organization and
development.



|Item 6. Exhibits and Reports On Form
  8-K
|------------------------------------------

|(a) | Exhibits                                                                        
|--- | --------------------------------------------------------------------------------
|   
|    | There are no reports required to be filed with this
      Report.               
|   
|(b) | Reports on Form 8-K                                                             
|   
|    | There were no reports on Form 8-K filed by the Company during
      the quarter.
|   



|SIGNATURES
|----------

Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.



|By Order of the Board of Directors:CARTOON ACQUISITION, INC.
|------------------------------------------------------------





|RANDOLPH S. HUDSONChief Executive
      OfficerChief Financial
      Officer
|----------------------------------------------------------------------------

15

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